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European telcos sulk about EU direction on regulation and investment

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Following an opaque and arcane ruling from a European Parliament committee there is concern that the continent is losing its way on telecoms.

The Committee on Industry, Research and Energy voted on a broad range of issues surrounding the involvement of the Eurocracy in the telecoms business. Among the conclusions of the vote were a move to reduce the cost of long distance calls within Europe, which seems to be an ideological move equivalent to the abolition of data roaming charges.

While this seems like another telco revenue stream under attack, most of the moaning was reserved for the realisation of fears expressed prior to the meeting; that the EU tending towards increased regulation and decreased investment in telecoms. This is exactly the opposite of what operators want.

The core issue is the direction of the European Electronic Communications Code – a collection of rules, regulations and initiatives originally designed to give European telcos a shot in the arm. Organisations such as ETNO (European Telecommunications Network Operators’ Association) have consistently complained about its apparent retreat from its lofty initial ambitions.

“For the Gigabit Society vision to be credible, the Code needs to stick to its original objectives,” said Lise Fuhr, ETNO Director General. “Without investment incentives and spectrum reform, European citizens and businesses risk being stripped of superfast networks and innovative services.”

Here are ETNO’s specific concerns:

  • Investment-conducive measures need to be restored and strengthened. All investment models for very high capacity networks should be provided with clear regulatory incentives. In particular, we regret the weakening of the Commission proposals to grant incentives to co-investment and that such incentives were not extended to other collaboration models.
  • The duration of spectrum licenses needs to remain 25 years or longer. An interim review of the license conditions would result into a major setback for investment in mobile connectivity and in 5G specifically. Long-term legal certainty is required in view of the long pay-back periods for 5G networks.
  • All unjustified regulatory proposals should be rejected. Economic regulation beyond the concept of single or joint dominance would not be legally consistent with the architecture of Europe’s telecoms laws. Similarly, additional retail price regulation is unjustified, with markets for intra-EU calls being competitive and customers being able to choose among multiple free alternatives.
  • Service regulation should boost consumer choice. Regulatory simplification should allow telecom operators to innovate as much as internet players, in order to provide increased choice for European consumers. At the same time, harmful regulation of bundles should be avoided. This would take away successful offers that are currently taken up by 7 in 10 European consumers (Ipsos, 2017).

ECTA (European Competitive Telecommunications Association) has also expressed concern, while the GSMA seems to have been too busy promoting its money-spinning events to comment. The real danger for European telcos is that their interests are sacrificed at the altar of super-state dogma. The EU seems to be obsessed with creating a United States of Europe and apparently considers the profits of its incumbent telcos to be a small price to pay.


2 comments

  1. Adrian Firth 05/10/2017 @ 1:36 pm

    Given that near-every ‘mainstream’ political party across EU member states is presently sitting on the fringes of electability, those in the UK being only the most obviously inept to local eyes, a proper federal EU starts to look infinitely preferable even to those not wholly enamoured of the idea. The EP merely reflects more or less questionable national narratives and decisions. But snark aside – the anti-federal dogma/click-baitery is an unwelcome distraction as always – of course the EU is pursuing a United States of Europe.

    Operators should relish such a state of affairs as should anyone proclaiming true interest in the outcome. Modern telecoms works through harmonization, which is intrinsically tied to economic and political convergence. A more readily identifiable supra-national body is one that is more readily lobbied to achieve the desired results. It’s the means by which to avoid situations of precisely the sort you outline.

    • Scott Bicheno Scott Bicheno 05/10/2017 @ 1:43 pm

      “But snark aside – the anti-federal dogma/click-baitery is an unwelcome distraction as always – of course the EU is pursuing a United States of Europe.”
      So you agree, good. But how is that click-baitery? And how is your pro-federal dogma any more welcome or any less distracting?

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